Support Tax Policies that Promote Business Investment, Development, and Expansion
AGC supports lowering the federal tax burden on individuals, construction companies, and other business as a means of promoting investment, business development, and business expansion. The tax code should strengthen the economy and provide businesses relief from burdensome and confusing tax rules and regulations. A strong economy is also critical to industry growth and job creation, which is why efforts to simplify and streamline the tax code must be found. Businesses and individual consumers face layers of taxes under the current system that are prohibitive as well as confusing.
Federal Tax Update
Headed in to the dog days of summer, the major political parties rolled out the tax planks of their campaign platforms as delegates gathered at quadrennial conventions to select presidential nominees. The chairmen of the congressional tax-writing committees did not produce legislative proposals (i.e. business integration plan; an international-focused tax bill) before departing for the summer congressional recess. AGC continues to analyze the developments of plans proposed by presidential candidates and members of Congress for the advantages and drawbacks on the construction industry and firms of all sizes and types.
Before the recess, AGC secured introduction of S. 3177, bipartisan companion legislation to H.R. 5361, the Public Buildings Renewal Act of 2016 that would create a new class of projects eligible for financing through private activity bonds (PABs) including public buildings such as schools, post offices, libraries, and courthouses. In short, the bill would create $5 billion allocation for public buildings for states to access through the Treasury Department. Visit AGC’s Action Center and urge your members of Congress to support these bills.
Federal Agency Action
Recall in early April, President Obama addressed the issue of corporate loopholes and broader tax reform; and the Treasury Department released the first update in four years to the President’s Framework for Business Tax Reform outlining the administration’s tax plan, as well as issued a Notice of Proposed Rulemaking regarding Section 385 Debt-Equity rules. In July, an AGC Financial Issues Committee expert testified at the IRS public hearing on the proposed 385 regulations, requesting that Treasury officials withdraw the proposed regulations and at the least, mitigate the collateral consequences on the construction industry. AGC sent a comprehensive comment letter to the IRS in advance of the public hearing. Congress communicated their concerns in writing to the Administration (House Democrats Letter, Republican Senate Finance Letter, Republican House W&M Letter). Members of Congress need to continue the conversation with the Administration during the recess. Visit AGC’s Action Center and urge your members of Congress to oppose the 385 regulations in their current form.
Action Needed in 2016
Support comprehensive tax reform that reduces tax rates for all business types, simplifies reporting procedures, creates an atmosphere of certainty and enhance both public and private infrastructure investment. Conventional thinking remains that comprehensive reform will follow the 2016 elections – and at a minimum, committee reports and candidates' proposals will serve as place markers as the tax reform debate continues in the next Congress – after the inauguration of the next President of the United States.
Meetings & Conferences
Financial Issues Committee (tax and accounting committee of AGC)
AGC/CFMA Construction Financial Management Conference
- Depreciation Policy (§179, Bonus, 15-year leasehold)
- Domestic Production Activities Deduction (§199)
- Research and Development Tax Credit
- Work Opportunity Tax Credit
- Like-kind Exchanges
- Carried Interest
- Built-In Gains Recognition
- Net Operating Losses
- Tax Exempt Financing
- Infrastructure Financing (Public -Private Partnerships (P3s)
- Commercial Building Energy Efficiency Tax Deduction
- New Markets Tax Credit
- Production Tax Credits